Is LSI Industries (LYTS) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is LSI Industries (LYTS). LYTS is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.73. This compares to its industry's average Forward P/E of 35.05. Over the past 52 weeks, LYTS's Forward P/E has been as high as 20.61 and as low as 8.55, with a median of 13.57.
Investors should also recognize that LYTS has a P/B ratio of 1.53. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. LYTS's current P/B looks attractive when compared to its industry's average P/B of 1.56. LYTS's P/B has been as high as 1.67 and as low as 1.03, with a median of 1.31, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. LYTS has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.6.
These are only a few of the key metrics included in LSI Industries's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, LYTS looks like an impressive value stock at the moment.
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